Standing Committee B

[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

Clause 41 - Conditions for exercise of powers

John McWilliam: Good morning. As no Liberal Democrat Member is here, would one of the other hon. Members in whose name amendment No. 67 stands like to move it?

Dominic Grieve: I beg to move amendment No. 67, in page 26, line 43, leave out `Crown' and insert `High'.
 Unexpected though this may be, I am happy to move the amendment—and to make a follow-up speech.

David Wilshire: You do not look as if you are.

John McWilliam: Order. I am not making a speech.

David Wilshire: I am sorry, Mr. McWilliam—and I should have asked your permission to take my jacket off, too. Shall I put it back on again?

John McWilliam: No. I give my permission for hon. Gentlemen to remove their jackets.

Dominic Grieve: Amendment No. 67 brings us to a topic that we touched on briefly when we discussed clause 6, which is whether the Crown court is a suitable venue for restraint proceedings. As the Minister is aware, although confiscation orders are made in the Crown court, the enforcement power of the confiscation order regime and the restraint orders lies in the High Court. Under the new provisions, it is the Government's intention to ensure that the Crown court is seized of the matter throughout. We can see the attraction of that action with regard to administrative efficiency, and if the entire proceedings are handled within one court, there are advantages. I suspect that the charges or costs of bringing the proceedings to the Crown court may be lower than if they were to be managed as High Court proceedings. Perhaps the Minister will confirm that.
 I seek reassurance about whether the Crown court has the training, skills and capacity for such an operation. To put it simply, there is no Crown court tradition of dealing with the complex issues of equitable law that will arise in respect of asset restraint. There is no department of Crown court judges and I believe that most Crown court judges would say that there were completely unqualified to carry out such an exercise. I am sure that the Minister will agree that the clauses that follow on from clause 41 show the complexity of the proceedings, which include the appointment of receivers, their powers, the restrictions on what they may do with restraint orders, and discharge and variation. They are all matters with which the High Court, not the Crown high, is extremely familiar. 
 As most Crown court judges are barristers or solicitors with practising certificates who have, for the most part, specialised in criminal work, I question whether the expertise exists to use such powers. It is easy for such an exercise to go wrong. If it were not carried out correctly, there would be costly appeals and further time and public money would be spent, which would probably be unnecessary if a proven method through the High Court were used. I also ask how easy it will be to find time in the Crown court to carry out such proceedings. My understanding of the way in which the Crown court works is that it moves from one trial to the next.

George Foulkes: That seems like a good idea.

Dominic Grieve: But because the programme for the court is on the basis of a morning start at 10.30 with a trial, applications—be they bail applications, applications for the discovery of documents, or public interest immunity applications—get slotted in beforehand. How will time be made available for complex applications that require the hearing of detailed argument on equitable principles of law, and about people's rights in respect of property?
 Will the Minister explain any discussions he may have had with the Lord Chancellor's Department about the way in which such a procedure will operate? In contrast, the High Court is probably better suited to slotting in applications, estimating time and incorporating the work as part of its mainstream business. Has that been properly thought through? I understand the temptation to say that the Crown court can deal with all this—indeed, that it is better if it does—and I see the theoretical justification for that. However, the High Court and the Crown court are two entirely different animals, and perhaps not all members of the Committee are aware of that. 
 I have some anxieties, and over the past few weeks I have raised the subject with High Court judges. They expressed their worries about whether the Crown court was capable of doing that type of work. That is anecdotal evidence, but I believe that the last thing High Court judges want is hold on to that type of work. They are already burdened with a huge range of duties and will not, I suspect, be particularly pleased when restraint orders are on their lists. I am worried that we could end up with a system that starts badly. Will Crown court judges be trained in the principles of such activities? They are outside both their judicial work and, almost certainly, the work that they will have practised as solicitors or barristers. 
 Will the Minister give a detailed explanation of the basis for making that particular decision and tell us how it will work in practice? What contact has there been with the judiciary and the Lord Chancellor's Department about its operation? What view does the Crown court service have about the impact of those applications on the courts' already overloaded casework? Unless those questions can be satisfactorily resolved, we as a Committee—and subsequently, Parliament as a whole—will be passing legislation that is unworkable in practice. If that happens, the whole issue will have to be disentangled. I want it to work and I want the restraint order procedure to work smoothly and efficiently. My experience, and everything that I have heard in conversations, suggests that there may be a problem in that particular area.

Alistair Carmichael: I apologise for not having been present for the very prompt commencement of business this morning. I assure the Committee that that happened not of any discourtesy but because of an inborn inability to be punctual. Hon. Members may be aware that I was born and brought up in a Gaelic-speaking area of Scotland—and that there is no word in Gaelic that quite expresses as much urgency as ``mañana''. I tender the appropriate apologies.
 I shall be brief, because the hon. Member for Beaconsfield (Mr. Grieve) gave a substantial exposition of the thinking behind the amendment, and I associate myself with the broad thrust of his remarks. It seems to me that by taking responsibility for the application of restraint orders from the Crown court to the High Court we would be able to put in place a necessary provision to protect the quality of the Bill's execution. 
 The hon. Member for Beaconsfield rightly drew attention to the fact that the nature and quality of the work undertaken in the Crown courts is normally different. They are essentially trials courts, whereas in this case we are dealing essentially with civil property litigation. Indeed, clear parallels could be drawn with the law of injunction in England, and certainly with that of interdict in Scotland. 
 The clarion cry with which Opposition Members are assailed day after day in the Committee is that we are being soft on crime and those who live on the proceeds of crime. After a while, that becomes slightly tedious, but if that were the only tedium with which I had to contend in the course of a working day, I should be quite happy. However, the suggestion that we take matters out of the Crown court and put them into the High Court assures us that on this occasion no accusation could be made of our being soft on anyone. In my experience—and, I am sure, that of the hon. Member for Beaconsfield and others—superior courts routinely take a much more severe and, dare I say, occasionally draconian approach to criminal and criminal-related work than is often taken in the lower courts. 
 As the hon. Member for Beaconsfield may have already made clear, this is a probing amendment. I am interested to hear about the Minister's thinking. I am not minded to ask for the amendment to be pressed at this stage, although I do not want to give any hostages to fortune as to how I may feel when I hear the Minister's explanation. It is important for the appropriate level for the determination of restraint orders to be fully explored at this stage. I look forward to the Minister's response.

Bob Ainsworth: The hon. Member for Beaconsfield was good enough to say that he saw some advantages in the proposal in the Bill. I am sorry that the hon. Member for Orkney and Shetland (Mr. Carmichael) feels that, sitting on the Opposition Benches, he suffers such tedium when we continue to throw such allegations at him. I ask him during the rest of the proceedings to imagine the tedium of being on the Government Benches when the hon. Member for Spelthorne (Mr. Wilshire) is going through the Bill trying to burn up the Committee's time.

Alistair Carmichael: I can hear him as well.

David Wilshire: I haven't said a word.

Bob Ainsworth: Yet.
 The amendment would require restraint proceedings to be held in the High Court, as at present. As we have said previously, it is our deliberate intention to transfer such proceedings to the Crown court. The amendment would therefore reverse one of the key changes that the Government are making to the current confiscation procedures. 
 The subject was discussed in some detail in the report of the performance and innovation unit, to which I have already referred. In the Government's view, the transfer of restraint from the High Court to the Crown court is fully justified. Our starting point is the number of restraint orders currently made. The performance and innovation unit report stated that only 252 orders were made in 1997, and 247 in 1998. 
 The Government's aim in part 2 is to increase greatly the use of confiscation as a tool against acquisitive crime, and we make no apologies for that. Effective and early restraint of the proceeds of crime is a critical element in the process. Due to the ease and speed with which cash and assets can be transferred to the safety of foreign jurisdictions, assets must be frozen as an emergency measure to prevent that from happening. The Government consider the transfer of restraint to the Crown court unavoidable, given the anticipated growth in the number of asset recovery proceedings. 
 The administrative court could not cope with a heavier workload. The Crown Office of the High Court is the only forum authorised to hear such cases. It has just 20 judges, who sit mainly in London, and it deals with a huge range of work, not just restraint proceedings. It is vital that restraint orders are available routinely and locally, to support the greater number of confiscations that we anticipate. The hon. Member for Beaconsfield is right to say that the Crown court does not deal with restraint matters, but it has dealt with complex property issues in confiscation cases for many years. 
 We need to ensure that there is expertise in the Crown court judiciary. The Home Office and the Lord Chancellor's Department are in discussion with the Judicial Studies Board about what support and training is required to underpin the transfer of restraint to the Crown court, and about other changes in the Bill. We have discussed and are still discussing those matters with the Lord Chancellor's Department, which is fully involved in the matter. 
 The hon. Member for Beaconsfield is good at taking a brief, but I suspect that he has a little more sympathy for the proposition than he would allow us to see. I am sure that he accepts that if we did not make the transfer, our ability to increase the number of cases would be restricted.

Dominic Grieve: I am not unsympathetic to what the Minister is trying to achieve with subsection (1), but I am a little worried and shall press him further. The Minister says that he is in discussion with the Lord Chancellor's Department. Those discussions should have taken place some time ago, and the Minister should be in a position to tell the Committee what will be done to provide the Crown court with the extra resources needed to handle such work.
 The Minister says that only 252 orders were made in 1997, and 247 in 1998. Does he have any statistical evidence about how much court time is taken up with such cases in a 12-month period? As the Minister says that we shall multiply the number of cases that are brought to court—indeed, we want that to happen—that information would be useful. It would give an idea of what resources are needed to handle the transfer.

Bob Ainsworth: No, I do not have that information at my fingertips. The hon. Gentleman should not try to misrepresent what I said. Discussions have been under way for some time. As the hon. Gentleman well knows, representations have been made against the Bill. I have had discussions with interested parties who expressed concern about the move. We have considered the matter and do not believe that it is possible to handle the anticipated increased volume of cases unless we change the venue, and unless we have the support of the Lord Chancellor's Department in believing that the transfer is feasible if appropriate training is provided.
 The discussions to identify what is needed will continue. We hope to make absolutely sure that the necessary expertise is provided.

Alistair Carmichael: I associate myself with the remarks of the hon. Member for Beaconsfield about resource increases, which will be crucial for the successful operation of the provisions. Will extra resources be required that cannot be given as easily to the High Court as to the Crown court?
 The Minister drew attention to work done in the Crown court on confiscation orders. I have glanced at clause 42 and I have not found the answer to one question, although it may be staring me in the face. What standard of proof will be required to make a restraint order? Earlier, I mentioned a parallel with injunction in England and Wales, and interdict in Scotland. In Scotland, the standard for obtaining an interdict, at least ad interim, is on the balance of convenience. That is much lower and raises a significant potential for injustice in terms of interference with an individual's property rights. The distinction between confiscation and restraint—

John McWilliam: Order. Restraint may be in order, because that was a very long intervention. The Minister must now continue his speech.

Bob Ainsworth: Costs are not our concern. In theory, additional resources could be thrown at the High Court rather than the Crown court, but that is not the way to achieve the required accessibility.
 The hon. Gentleman and the hon. Member for Beaconsfield made valid points about providing an analysis of the costs of current cases to give us that information during the passage of the Bill. I shall do that if I can. However, our main concern is not costs but accessibility, and the ability to use the powers more widely. 
 The hon. Gentleman asked what standard of proof will be required. The court must ask whether there is reasonable cause to believe that an offender has benefited from the proceeds of crime. Such a case must be made when obtaining the original restraining order. In view of my assurance to try to find out the cost—in terms of time—of current cases so that hon. Members can examine it, I ask for the amendment to be withdrawn.

Alistair Carmichael: Will the Minister consider an amendment that I might have drafted if I had been clever enough to think of it at the time? If he is not minded to accept the present amendment, will he consider tabling an amendment at a later stage to allow the power to be used by either the Crown court or the High Court? There will be several immensely complicated cases that it could be appropriate for the director or prosecutor to take to the High Court in the first instance.

Bob Ainsworth: I am not minded to do that. We discussed the matter for some time, and discussed the different representations that were made to us. There would be huge advantages in concentrating the expertise in the Crown court. We would not do that if we split responsibilities and took complicated cases to the High Court. I am not dreadfully sympathetic to the hon. Gentleman's suggestion. I have heard the argument that more routine cases should be dealt with in the Crown court and more complex cases in the High Court. The Crown court is more than capable of dealing with the all cases provided that it receives appropriate resources and training, the requirement for which we must discuss.

Dominic Grieve: I appreciate what the Minister has said, but I continue to have worries about the matter. The answers that he has given the Committee worry me; indeed, I am a bit more worried now than I was when I first spoke.
 The Bill will pass on to the other place in February, and I assume that the Government intend to have it on the statute book by the summer. I am unsure of the start date—the Minister might already know it—but I assume that we want to set the system up as quickly as possible. However, it is not possible to magic up new Crown court judges in 24 hours—or, indeed, in six months—or to identify swiftly where to find the expertise to deal with this kind of application. 
 The best point that the Minister made was that the current resources of the Crown Office appear to be insufficient to deal with the likely rise in workload. However, I believe that the resources of the Crown courts, too, are inadequate. Perhaps I am a suspicious man, but, at some point in the near future we shall consider the Auld report, and I hope that when that happens, we will not be told that Crown court judges are so busy dealing with restraint orders under confiscation proceedings that that is a justification for reducing the incidence of jury trial by relegating such trials to a new, lower court. In my view, all those matters are, potentially, intimately linked together, and I am not satisfied with the Government's apparent approach to them. 
 I appreciate that it would have been difficult, as it takes time to sort such things out, but I would have been reassured if the Minister had offered us an outline that said, ``We've discussed the matter with the Lord Chancellor and his Department, and he has already agreed that there is likely to be a need for, say, 20 more Crown court judges, and in view of the change in the Crown court judges' workload, the Lord Chancellor is going to try to recruit practitioners who have experience of this type of work. All that is well on the way to being organised.'' However, the Minister has not offered us such an outline. Instead, one gets the distinct impression that there have been some preliminary discussions, and anxieties have been flagged up, but the Government have gone ahead, and they are convinced that the matter will sort itself out. 
 A major change is being proposed—cases will be transferred from the High Court to the Crown court. Perhaps that is justified, but I am a conservative with a small ``c'': if someone wishes to win my support for changing an existing system, they must persuade me that the new system will work, and I have not been persuaded that that will be the case. 
 I am therefore minded to press the amendment to a Division. That will register the fact that Opposition Members hold to the view—I believe it has cross-party support—that until we are persuaded that something is going to work better, and the detail has been provided to persuade us of that, we should stick to the original system. A Division will also serve as a marker when the matter is considered in the other place; at that time, the Government might have further developed their ideas, in which case they will be able to explain in greater detail how the system will operate in practice—and many of their lordships have considerable experience of how the High Court and the Crown court work. 
 I acknowledge that it is difficult to predict how many applications there will be, but this is a major change, and the Minister has not reassured me that the Government have got to grips with its implications. I am also worried about the possible knock-on consequences, in view of the Government's other projects that will affect what the Crown court will be doing in two, three or five years. 
 Question put, That the amendment be made:—
The Committee divided: Ayes 6, Noes 13.

Question accordingly negatived. 
 Question proposed, That the clause stand part of the Bill. 
Mr. Wilshire rose—

Hon. Members: Oh.

David Wilshire: I am sorry to disappoint Labour Members, but I wanted to make sure that I had not lost my voice. My contribution will be brief. I am always worried when I notice words like ``undue''. Subsections (7) and (8) refer to ``undue delay'', and I wonder whether there is a legal definition of what ``undue'' means. I can see a danger of somebody being involved in this sort of procedure, and the thing dragging on and on. With the greatest of respect to those who simply want to browbeat the accused, it is necessary to ensure that justice applies to them. The stress and strain of dragging it out in what many people would think was an unreasonable way—[Laughter.] The Minister of State is taking the wrong point. I hasten to add that I refer to things being dragged out in court. If there is a definition of ``undue'', it would be helpful to know what it is. Will the Minister also explain how the accused, or the person involved in the process, could avail himself of the provision? Does someone have to go to the court and argue that the delay is undue, or would a court automatically say that the delay was unreasonable and act on its own accord?

Bob Ainsworth: There is no definition of ``undue''. It is at the discretion of the court to decide whether undue delay has occurred. There are provisions in the Bill for any of the parties affected by the measures to make representations to the court on them.
 Question put and agreed to. 
 Clause 41 ordered to stand part of the Bill.

Clause 42 - Restraint orders

Question proposed, That the clause stand part of the Bill.

Dominic Grieve: I seek clarification from the Minister on one matter. I want to draw it to the attention of the Committee, because it may flag up a point of interest. One of the features of restraint orders as provided for under subsection (4) is that once the money has been restrained, you may be able to make use of it in a number of ways, under subsection (3), which states:
``make provision for reasonable living expenses . . . make provision for the purpose of enabling any person to carry on any trade, business, profession or occupation . . . subject to conditions.''
 However, subsection (4) states: 
``an exception to a restraint order must not make provision for any legal expenses which—
(a) relate to an offence which falls within subsection (5), and
(b) are incurred by a person against whom proceedings for the offence have been started or by a recipient of a tainted gift.''
 Subsection (5) provides definitions. 
 I suppose that if you have a multimillionaire whose assets are placed under restraint, it would be undesirable if the money were frittered away on lawyer's fees as the case piled up, month after month, in relation to the offence for which he has been charged. Equally, however, it is a slightly odd state of affairs, especially in the public mind, if a Mr. Big who has yachts, villas, houses and motor cars is in receipt of legal aid on a full certificate. Given the way in which the legal aid principles operate, I wonder whether difficulty might arise if, for instance, legal aid were not granted for something that he wanted to deal with in the course of his defence. In those circumstances, he might feel aggrieved, and say, ``I'm perfectly prepared to spend my own money, but I'm not being allowed to, because it's subject to restraint.'' That raises an interesting human rights point, which I just wanted to flag up. 
 Can the Minister provide a little detail about the background to the provisions? I suspect that they applied in the earlier regime. Will he explain what happens at the end of the day? Will you end up with a legal aid bill of £5 million for convicting Mr. Big, without any regard to the fact that the money that was restrained and recovered would have covered that amount? That is bad PR for the legal system. Will the Minister explain how the system is designed to work?

John McWilliam: Order. I did not want to interrupt the hon. Gentleman's peroration, but he used the word ``you'' many times. I have no intention of paying anyone's legal aid bill of £5 million.

David Wilshire: I am concerned about two or three matters in the clause. First, under subsection (1) it seems that the court can make an order against any specified person rather than the person against whom proceedings are being considered. I understand why that might be so, in that there could be associates who hold property jointly with the person being investigated. However, it is worrying if we are being asked to give the court power to go on a fishing expedition, when it could be said, ``So-and-so might know the other person, so let's just slap a restraint order on him, too.''
 I shall take the Committee back to the circumstances in which my sister and I are trying to sort out my mother's estate and distribute it according to her wishes. If by any chance I, or my sister—I have no reason to believe that my sister is involved, but I shall leave the Committee to make up its own mind whether this might apply to me—were caught up in such a procedure, would that mean that someone could prevent my mother's assets from being disposed of, on the offchance that that might suit someone's purposes later on? Will the Minister reassure us that there must be good reasonable grounds for suspicion rather than allowing a fishing expedition on the offchance that something will be caught? 
 My hon. Friend the Member for Beaconsfield touched briefly on my next point. Subsection (3) refers to any ``reasonable legal expenses''. What are reasonable legal expenses? I enter such a minefield with some trepidation in the knowledge that there are many lawyers in the Committee. I am sure that they would tell me that reasonable legal expenses are whatever they usually charge. That is unacceptable. I have a vested interest, in that my young son is a barrister and he complains regularly that he is not paid enough. [Hon. Members: ``Shame.''] I say shame, too, because sometimes he cries on my shoulder about it. I should make it clear that my spurious legal advice or reasoning owes nothing to my son, but everything to me. I would not wish him to be held responsible for anything that I might say. 
 Given that we will be almost certainly dealing with criminal charges at some stage, it must be made clear whether ``reasonable legal expenses'' in such circumstances would be judged on the basis of the legal aid payments made to barristers and solicitors—which, according to young barristers, are miserly in the extreme—or whether we are making allowances for the fees charged in the open market for a private client, which are considerably in excess of those payments. Would it be reasonable for such a distinction be made, given that it would encourage people to engage more expensive barristers? Clarification would be helpful. 
 I am also concerned about the point raised by my hon. Friend the Member for Beaconsfield, because to preclude being able to make allowances for a key person in the arrangement is a little unfair 
 I appreciate the fact that the clause is aimed at confiscation in England and Wales, and that we shall deal with other parts of the United Kingdom elsewhere in the Bill, but I should like the Minister to clear up what may well be a misunderstanding. Subsection (9) states: 
``Dealing with property includes removing it from England and Wales.''
 I assume that the subsection deals with a case heard in England or Wales. It seems to me that the defendant may have property in Northern Ireland or Scotland. Even when the court's proceedings are held in England, property outside England and Wales is not covered by the order. I am sure that there is an explanation for that, but I would like to hear it.

Bob Ainsworth: I am worried about the effect that various members of the family of the hon. Member for Spelthorne are having on our proceedings.
 The hon. Member for Beaconsfield thought that I would say that the provision must be in current legislation, but I will not. With regard to his point about subsection (4), we are changing the current legislation. We are doing that because the PIU report elaborated on the fact that money held under restraint is frequently dissipated on legal fees. 
 If a restraint order has been obtained for the property held by a defendant, but no proceedings have yet been instituted, the court can order the release of money from funds held under restraint so that he can pay his legal costs. If those costs lead to the release of all his assets under restraint and he has no further funds, he should be eligible to apply for civil legal aid until the institution of proceedings. 
 If the money held under restraint is exhausted, it is unlikely that a case would remain that could deprive a defendant of his assets, and there would be no assets under restraint for him to contest. However, as a safeguard, we are arranging that in such circumstances the defendant could apply for civil legal aid prior to the institution of proceedings. The legislation does not at present provide for that, so we shall introduce an amendment to the Access to Justice Act 1999 in due course. 
 A person who holds a tainted gift and whose property is restrained will not be able to draw on a restrained asset or assets for his legal expenses, as that would lead to a variation of his restraint order. We intend that such a person should be eligible for civil legal aid under the normal rules, and we shall introduce an amendment to the 1999 Act to provide for that, too. 
 The court will continue to be able to release restrained assets to enable other third parties affected by a restraint order to contest it. In practice, other third parties rarely, if ever, make such applications, usually because the assets do not belong to them. However, if a third party wishes to make an application and the court is not prepared to release any frozen assets and the applicant has no other funds, we intend to make legal aid available under the usual conditions. Again, we shall introduce an amendment to the 1999 Act to provide for that. 
 The hon. Member for Spelthorne asked about the word ``reasonable''. It is for the court to decide what is reasonable, even if that might infringe indirectly on the hon. Gentleman's pocket. He rightly says that the Bill states that property under restraint cannot be removed from England and Wales. That covers all properties held by the defendant, wherever they are, but enforcement is a matter for each jurisdiction. 
 There will be the necessity for co-operation, and arrangements for that are in part 2 of the Bill. 
 Question put and agreed to. 
 Clause 42 ordered to stand part of the Bill.

Clause 43 - Application, discharge and variation

Question proposed, That the clause stand part of the Bill.

Dominic Grieve: I am pretty sure that I had a query on this clause. Ah, yes—may I ask the Minister to consider who will be able to initiate the process of application for a restraint order? I am mindful of the fact that the matter might be better addressed when we consider clause 68. However, past practice is that those who could initiate had to be police officers of superintendent rank or customs officers of equivalent rank. We are now to allow financial investigators of the sort specified in an order by the Secretary of State to do that. I understand the reason for that, but the Minister will understand that the earlier legislation provided that there must be a police superintendent or a customs officer of equivalent rank, to ensure that powers were used only in appropriate cases. What reassurance can the Minister provide about how the system will be set up, so as to ensure that the financial investigator who may initiate such applications commands confidence in the same way?

Bob Ainsworth: Clause 43 lays down who may be able to apply for a restraint order, and sets out criteria such as those in existing legislation for the variation or discharge of restraint orders. In addition to changing the venue for restraint order hearings and bringing forward the point at which the orders may be made, the clause provides that the prosecutor, the director or an accredited financial investigator may make an application. We discussed accreditation during an earlier sitting when we discussed the setting up of the agency.

David Wilshire: That is one of the points that I was going to raise with the Minister. The director is mentioned in the clause. Will the Minister confirm whether that means the director in person, or any of the other people whom the director chooses to appoint? If I remember correctly, the director can appoint any number of people to discharge any of his responsibilities.

Bob Ainsworth: We want the director to be able to pass his responsibilities down to appropriately trained people. This case will involve the director or those accredited by him as financial investigators. Such people will have the appropriate skill to ensure that restraint orders will be applied for only when they are justified.
 For such reasons, we intend to give accredited financial investigators the ability to apply for restraint orders. That is a new measure. Accredited financial investigators are those who are accredited by the director in accordance with clause 3. They are likely to be employed primarily in the police force, in financial investigation units or by Customs and Excise. As I said regarding the venue, considerable expertise is sometimes required to make the investigations, and people will want to know that only appropriately qualified people will apply for them.

Dominic Grieve: I appreciate that. However, there may be a difference between the consequences of misfeasance by a senior police officer or customs officer, and the disciplinary regime to which a financial investigator is subjected if powers are exceeded or used incorrectly. That is why I have greater confidence in a system that is reliant on police officers or customs officers who are subject to an established disciplinary regime and a standard complaints mechanism, rather than on a financial investigator who, presumably, has an ordinary civilian or civil service status. That is why we should approach that issue with caution, and I hope that when the Minister considers its details, he will ensure that the status of the financial investigator is such that there is a complaints or disciplinary procedure similar to those that apply to police and customs officers.

Bob Ainsworth: The hon. Gentleman said that it might be appropriate to discuss the matter when we debate a later clause. The Bill is complicated, but if he looks forward to clause 68, he will see that provisions are made for the oversight of such matters by a superintendent.
 Question put and agreed to. 
 Clause 43 ordered to stand part of the Bill.

Clause 44 - Appeal to Court of Appeal

Question proposed, That the clause stand part of the Bill.

Alistair Carmichael: Members of the Committee will be aware that my colleagues and I tabled an amendment to clause 44 that was not selected for debate. That immediately makes me suspicious that perhaps I have completely missed the point—

John McWilliam: Order. The clause stand part debate should not be used as an excuse to reintroduce a non-selected amendment. There is a good reason why that amendment was not selected.

Alistair Carmichael: That will immediately become apparent when I raise my concern.
 The clause allows for an appeal by an agency of the state. It also allows for an appeal by 
``any person affected by the order.''
 Presumably, that would be the defendant or a third party. The clause allows for them to appeal against an application for discharge or variation, or an order under clause 42(7) made to ensure that a restraint order is effective. However, it appears to me that it does not allow for an appeal against the restraint order itself by any person affected by that order. That is wrong—but I might have horribly misunderstood the clause. I would like the Minister to clarify the matter.

Dominic Grieve: I wish to make the same point. It is of concern to me that the provisions of the Bill restrain the ability of a defendant to appeal against decisions. It is unfortunate that the Committee did not get a chance to discuss that matter in relation to clause 32—because we did not reach it.
 If I understand clause 44 correctly, it is possible for the defendant to appeal, but only after he has made a further application for the variation or discharge of the order. It is important that the system is fair, and I want the Minister to explain why it has been thought necessary to introduce that fetter.

Alistair Carmichael: The inevitable consequence is that an aggrieved party will make an application for a discharge or variation simply to gain access to an appeal. That does not make sense.

Dominic Grieve: I agree that there is a risk of that happening. If someone wishes to appeal the order, they will have to go through that process. It might therefore be simpler to offer an immediate avenue of appeal, rather than those two stages.

Bob Ainsworth: I agree wholeheartedly that it is a shame that we did not manage to discuss clause 32. However, I remind the hon. Gentleman that we had extensive discussions about the timetable motion, and that there is a great desire on the Government side of the Committee to take on board any knowledge that he can bring to our proceedings that helps to improve the legislation. If he could have a word with his Whip, that might be helpful, as the Committee might then be able to scrutinise the Bill better, and we might wind up with better legislation. But if he plays the game of deliberately preventing the timetable motion from working, we will not be able to debate important clauses, and he will not have the chance to discuss those issues. His complaint should be made in a different direction.
 There is a general right of appeal against any order of the High Court, under section 16 of the Supreme Court Act 1981. It applies to restraint orders made by the High Court at present, and orders ancillary to them. However, the general right of appeal in the 1981 Act does not apply to the Crown court. It has therefore been necessary to create a specific right of appeal in the Bill in relation to restraint orders made, or not made, by the Crown court. 
 As the hon. Member for Orkney and Shetland rightly points out in referring to his amendment that was not selected, there is no right of appeal against a Crown court's decision to make a restraint order. The appeal lies only against the Crown court's decision to vary or discharge an order, or not to do so. A person who is dissatisfied with a restraint order can in the first instance apply to the Crown court for its variation, and subsequently, if he is unhappy with the refusal to vary it, appeal against that decision. I do not know why the hon. Member for Orkney and Shetland regards that as a big problem. We would have thought that it was most sensible to specify that the Crown court is the place for people to request a variation with a right to appeal against the Crown court's refusal to make a variation, rather than automatically kicking the right of appeal.

Alistair Carmichael: I am acutely aware that I am blundering through English civil and criminal procedure, in which I have no qualification, practice or expertise. However, I would expect an application for variation or discharge to proceed as a matter of fact, and a point of appeal to be on a point of law. For that reason, I believe that an application for variation or discharge would be inappropriate. Indeed, if that were the point to be taken on appeal, the appeal would be unsuccessful.

Bob Ainsworth: I am no greater expert than the hon. Gentleman, but we want such issues to be dealt with in the Crown court, and as I said, we believe that if people are unhappy with the confiscation order, that is the first place in which to make their complaint.

Alistair Carmichael: Will the Minister confirm whether the appeal will be on a point of law? That is crucial, because if an appeal will be allowed only on a decision to vary or discharge an order, if it is restricted to a point of law, all that the Court of Appeal will consider is whether the decision to vary or discharge as a matter of law was correct.

Bob Ainsworth: I can now inform the hon. Gentleman that the appeal will be not on a point of law only, but on a refusal to vary or discharge a confiscation order.

Alistair Carmichael: I respectfully ask that perhaps at a later stage the drafting of the Bill might be altered to make that an express provision.

Bob Ainsworth: I undertake to consider whether that is necessary.
 Question put and agreed to. 
 Clause 44 ordered to stand part of the Bill. 
 Clauses 45 to 48 ordered to stand part of the Bill.

Clause 49 - Powers

George Foulkes: I beg to move amendment No. 39, in page 30, line 36, leave out from `property' to end of line 37.

John McWilliam: With this it will be convenient to take Government amendments Nos. 40 to 44, 46 and 47.

George Foulkes: This is a group of eight minor amendments concerning management receivers, directors' receivers and enforcement receivers. Amendment Nos. 39, 43 and 46 delete the power of the court to impose conditions or exceptions when it confers the power to take possession of property upon the receiver. However, amendments Nos. 42, 44 and 47 give the court the wider discretion to impose conditions or exceptions when it confers any power on the receiver under clauses 49, 51 and 53.
 Amendment Nos. 40 and 41 relate to the ability of a management receiver to pay his or her remuneration and expenses out of the managed property. Amendment No. 40 is purely technical. The receiver is to be permitted to meet his expenses out of the property that he is managing. However, the power to sell assets might be too narrow if, for example, the receiver wished to take money from a bank account. I am sure the Committee—particularly the hon. Member for Beaconsfield—will understand that the word ``realised'' has a broader meaning than the word ``sell'' and will give the receiver more latitude. 
 Amendment 41 is substantive. It makes clear that before a receiver is allowed to draw down any of the managed assets for his or her remuneration and expenses, third parties must be given the right to be heard. In practice, a management receiver is never allowed to draw down assets that may be subject to a third party claim. The amendment gives explicit statutory recognition to the principle.

Dominic Grieve: I listened carefully to what the Minister had to say. I had hoped that he would explain in more detail the reasoning behind the amendments, rather than simply explaining the bare bones of what they would achieve. If I understood the hon. Gentleman correctly, the amendment is designed, in the case of a management receiver who is dealing with property under a restraint order, to give him the power to be remunerated from the assets that are under restraint and widen those powers to enable him to draw down certain assets more easily. I have a worry about that. The assets are under restraint. They are not assets that have been confiscated, nor is the confiscation process taking place. It must therefore be possible that, at a later stage, those assets—if the confiscation procedure does not work—might have to be returned to the defendant.
 That brings us to an issue that we should look at later. Indeed, last night I was drafting an amendment about the potential knock-on effects on an individual of the way in which his assets are handled during the restraint procedure. Let us suppose that a person has a pool of money and the receiver draws down on that money while the assets are under restraint. If at a subsequent point—I ask the Minister to reassure me on this—no confiscation order is made, the pool of money will have to be replaced before it is given back to the defendant. That will compensate him, and the cost of the receivership will be borne by the taxpayer and by the state. 
 If, during the course of the receivership under the restraint order, there is a complete muddling of the defendant's existing financial arrangements, he may have a legitimate grievance. The immediate monetary loss that he has suffered will not in fact be his true loss. The true loss is much more complex, and is incalculable, because his business and everything associated with it may have been destroyed. The Committee ought to bear that possibility seriously in mind, because we are using the restraint procedure widely for a variety of individuals, with the intention that we will confiscate. Of course if we confiscate, there is no problem. However, if we end up not confiscating for any reason, it is incumbent on us to ensure that a regime is in place that minimises and removes any suggestion that the person has been subject to a financial disadvantage. That may be impossible to achieve in 100 per cent. of cases, but it means that careful thought must be given to issues such as who pays the receiver. While the assets are under restraint, there is a strong argument that the receiver should be paid by the state. If, after the completion of the process, a confiscation order is made, that is the time for the receiver to draw down his money from the confiscated assets.

Mark Field: I shall speak simply to say that I agree with my hon. Friend. I appreciate what the Government are trying to achieve. The restraint period will be long drawn out, and significant expenses will be incurred. If large amounts of assets are under restraint, those assets should be available for the remuneration of a receiver. It should be remembered, however, that in any insolvency situation professional advisers have a prior claim. That is analogous, if not directly comparable. None the less, it would be inconvenient, apart from anything else, if assets were sold at what would inevitably be a knock-down sale price, and the restraint order and confiscation order then moved in the opposite direction. It would cause great embarrassment to the authorities if it was discovered that hundreds of thousands of pounds of undervalued assets had been sold off to pay fees, and the end result was the reimbursement of a defendant. It seems common sense that in the first instance, the state, rather than the assets of the defendant, should pay the fees over what should normally be a short period.

Boris Johnson: I just want to say how vehemently I agree with my hon. Friends, and to add a layman's point of view. During our discussion of the restraint orders, appeal process and so on, one question has formed in my mind, which I would be grateful if the Minister would answer. I can understand the logic of freezing the potential villain's assets, because although he has not been convicted of anything, we do not want him to scarper, disperse his assets and make them unavailable for confiscation. If the assets are frozen, the receiver can avail himself of them to remunerate himself. Before the individual has been convicted, his property is being taken away, and I can see that there may be arguments in favour of that—but how long will that situation go on?
 Is there a time limit to the restraint order and the freezing process before the charges are brought and the potential villain is charged with an offence? There seems to be a long period during which assets can be frozen, and frittered away by the state, and then it may be discovered that the assets snaffled by the director and the receiver were not the proceeds of crime, so they may have to be returned to the individual concerned. How long will it all go on? Does the Bill contain a provision for minimising that period? I have not discovered such a provision yet. 
Several hon. Members rose—

John McWilliam: Order. The debate has ranged considerably more widely than the amendments. I am now taking a view on the clause stand part debate, so I suspect that if hon. Members wish to discuss clause stand part now, they should carry on as they are doing.

David Wilshire: I am grateful for those remarks, Mr. McWilliam. I want to ask something specific about the matter that we are debating, but some of the points that I wish to make are not wholly relevant to whether we accept the amendment to change the word ``sell'' to the word ``realise''. I seek your guidance, Mr. McWilliam, because in a sense, my comments will be a stand part contribution. If I understand you correctly, it will be in order to raise other points that are wholly related to the stand part debate.

John McWilliam: It strikes me that hon. Members are already discussing clause stand part rather than the amendments. The hon. Gentleman should continue, and we will dispense with the clause stand part debate.

David Wilshire: I am grateful for your guidance, Mr. McWilliam.
 I am sorry if Government Members sometimes think that I do not raise matters that are relevant or important to the layman. However, the points that I raise are all genuine, and the following points are especially so. 
 I am greatly worried by the debate. We are currently dealing with a person who, in British law, is innocent and not yet proved guilty. If that person is found to be not guilty of any of the charges, there are serious risks. The Government should spell out their thinking. My hon. Friend the Member for Beaconsfield said—I am sure that he is right—that if a not guilty verdict is returned, all assets that may have been taken must be returned. That is simple common sense. However, it is not that simple, because many issues that may arise must be addressed. For example, if certain assets are disposed of and must be reacquired, they could have earned interest, so interest will have been lost while they were not owned. Will the returning of the assets include interest earned? Natural justice would suggest that it should. 
 There is a further factor, which is—I do not apologise for returning to my mother's situation—that certain assets that a person or estate holds have a meaning and value that cannot be put in monetary terms. We should address seriously the issue of compensation, not only that of returning assets. If an asset that is disposed of cannot be recovered in its entirety, the price that would be fetched at auction will be inadequate, because more harm has been done to an innocent person than simple deprivation of money. Does the Minister envisage an allowance for compensation over and above the pure monetary value of an asset that is disposed of and subsequently recovered? 
 Some assets realised could be shares in public companies. Would such shares be recovered at the price at which they were sold or the price at which they would be bought back to return to the owner? We may consider the allowance of shares of a particular sort—I was going to discuss Railtrack, but that matter has overtones that would obscure my point—such as shares in the aviation industry. If proceedings had started before 11 September, shares in parts of the aviation industry would have been worth a lot, but now they are not. The value placed on them could be the value on the date when they were sold, which could have been after 11 September. Assets could have been seized before 11 September, and sold afterwards.

David Tredinnick: I have been looking at the Minister, and I suspect that he is not going along with what my hon. Friend said. Given the current terrorist problems, there are likely to be wild gyrations in markets. This is not about whether there is a 5 or 10 per cent. difference in valuation, because differences could be more substantial. My hon. Friend's point is extremely valuable, and I hope that he will pursue the question of how we assess and achieve a correct valuation.

David Wilshire: I am grateful to my hon. Friend for making such a serious point. The Government must deal with it. Let us suppose that my assets were seized some time last August when I was in the process of disposing of them. I would have disposed of them between in August or at the beginning of September at a particular price. However, if the receiver had seized those assets in August and proceeded to sell them in October or November, would the Government argue that the true value of the property disposed of in October was the value in October or the value in August, when I would have disposed of them? As my hon. Friend the Member for Bosworth (Mr. Tredinnick) said, that could make a huge difference in the money raised, which could mean that large sums were involved.
 It is easy to say that I am raising minor points, but we must contemplate the implications for British justice of someone being acquitted of all charges, despite every endeavour being made to replace the money that was seized. If the money that goes back is less than the value of the money seized, a huge injustice will have been done. The Minister must consider such possibilities. 
 I shall take your guidance, Mr. McWilliam, and raise now the couple of points that I would have raised on stand part. Under subsection (3), 
``The court may by order confer on the receiver power to enter any premises''.
 If the entry results in damage to the property, after which the person is acquitted, I assume that the taxpayer will pay for that damage. I should be grateful to receive confirmation of that. 
 Under subsection (2), the court gives the 
``power to manage or otherwise deal with the property''.
 I assume that that includes selling the property. If the property disposed of is earning interest and that interest is being used by the person who owns the property to pay for his family, for example, who will get the interest on the property that is seized? Is it the state, or is the interest handed over to enable that person to continue living his normal lifestyle until he is convicted? I do not believe that it is just to take away a person's property and remove his income, as a result of which he will lose the means of sustaining himself while the whole process trundles along, only for there to be a not guilty verdict in the end. That person would have lost a huge amount of income for a long time. I should be grateful to receive the Minister's comments on that position.

George Foulkes: When my hon. Friend the Under-Secretary was replying to various points made by the hon. Member for Beaconsfield, I was thinking about how long I have been around. I remember, with great affection, the hon. Gentleman's father. He was a distinguished and delightful Member of Parliament, and I had great respect for him. I have tried to think of an adjective to describe the hon. Gentleman himself, and the words ``diligent'', ``courteous'' and ``learned'' came to mind. However, when he turned up yesterday at Westminster Hall to speak in a debate about rural Scotland, ``ubiquitous'' seemed to be the only adjective to describe him. He is diligent in pursuing certain points, and he has the courtesy and accuracy that is not always shared by Opposition Members.
 Clause 49 sets out the powers that the court can confer on a management receiver to manage property. I say to the hon. Member for Spelthorne that that person is managing the property pending conviction and confiscation. The clause makes a change from the present legislation, which does not set out such powers in detail. That is because they are inherently available to the High Court. Given that the Bill now gives the Crown court, instead of the High Court, the power to appoint both management and enforcement receivers, it is prudent to set out in full the powers that it will need to ensure that the provisions work effectively. 
 Subsection (7) prevents the powers from being exercised in relation to property that was made subject to a charging order under earlier confiscation legislation in England and Wales or Northern Ireland. No provision was made for charging orders in the Scottish legislation. 
 Subsection (8) states that the courts may not confer on the receiver the power to manage, deal with or realise property, including interests in tainted property, 
``unless it gives persons holding interests in the property a reasonable opportunity to make representations to it.''
 That has the same effect as provisions in existing legislation. In addition, we have made some technical amendments to this and other clauses that will add to its effectiveness. 
 Let me deal with specific points made by hon. Members. I say to the hon. Member for Beaconsfield that if the management receiver were not paid by someone—and it seems appropriate to pay him out of the assets—we could not employ him. The hon. Gentleman will be reassured to hear that there are provisions for compensation in clause 72 that could be used if there were a serious fault. 
 I say to the hon. Member for Henley (Mr. Johnson) that the clause is cross-referenced with many other clauses that qualify and deal with the points that he raised. Clause 41(7) states that there should be no ``undue delay'' in proceedings. Under other clauses, the defendant may apply to the court to have the order varied or set aside, if he is concerned. The time limit on proceedings is a matter for the court, but normally the High Court specifies and reviews the period. We expect the Crown court to do the same. 
 I say to the hon. Member for Spelthorne that interest must be taken into account, because the assets under restraint are still owned by the defendant, and the receiver merely manages them on the defendant's behalf. The receiver must retain the value of the assets. I refer hon. Members to clause 69(2), which states that the powers must be exercised with a view to maximising their value. A defendant would have lost money as a result of 11 September regardless of whether the assets were managed by a receiver or by him. 
 I say to the hon. Member for Beaconsfield, and indeed to other Opposition Members who made similar points, that the clause deals with anticipated criminal proceedings. We must strike a balance. We must take account of the interests of the state, of the public and of victims. I hope that I have dealt with the matters raised.

Dominic Grieve: I appreciate the Minister's point that we are dealing with anticipated criminal proceedings. The purpose of bringing those proceedings is to convict the defendant and confiscate his assets. Dealing with crime is an important part of the Government's law enforcement armoury. My anxiety is not about that but about people who emerge from the process with no conviction and no confiscation order, or those who are convicted but do not receive a confiscation order. Such people have rights. I am concerned to ensure that, so far as is possible, the process minimises any adverse impact on such people's financial arrangements.
 I have drafted an amendment to clause 69 intended—although perhaps it does not do it particularly well—to encapsulate what troubles me with regard to these clauses, which are linked in many ways. 
 If we do not deal with the issue in the right way, I foresee that applications with regard to interference with property rights will be made under the Human Rights Act. The applicants will say, ``These assets were seized. They were managed in this fashion. The payment of the receiver cost thousands of pounds.'' Receivers do not come cheap; they make more money than almost anybody else. I cannot remember what the receivers of Railtrack are charging Ernst and Young for its services, but it is a fairly stupendous sum. 
 The applicants may go on to say, ``Receivers came in, and they had to draw down on my assets to meet their needs.'' As I have said, if those assets are merely a cash sum, that can easily be replenished. However, if a business has to be sold, that cannot be easily restored. 
 I am concerned about how the management of assets should take place in such circumstances—we will return to that matter when we debate clause 69. Historically, receivership has usually come about when someone is going bankrupt—or, at least, heading for insolvency. The justification for appointing a receiver to manage those assets is that the person who owns them is already unable to meet his financial obligations. 
 However, with regard to the matter under discussion, receivers might be introduced in cases involving people who are solvent. Indeed, those people might be exceedingly prosperous and successful, and they might play a major role in the economic life of their locality—and all that might be damaged, long before a decision on confiscation was made, if the receivers were introduced. That would not matter if confiscation were to take place. However, if situations arise in which there is no confiscation, I foresee that there will be serious problems. 
 As the Minister has rightly said, in the past the sort of regime that we are debating has been sparingly used, because there have not been many relevant cases. However, if he succeeds in the legislation, it is to be anticipated that there will be a large number of cases, and we would therefore have to accept—because of the laws of statistics and human nature, and the capacity of human beings to get things wrong—that the cases in which individuals are subjected to this process will increase, and that there will also be a rise in the number who are acquitted of any offence and have their assets, nominally, returned to them. The Committee would not be doing its job properly if it did not challenge proposals that might lead to individuals claiming that their livelihoods suffered a massive adverse impact that cannot be adequately compensated in monetary terms. 
 The matter is made even worse by the fact that—we will also consider this later—the term ``serious'' default is introduced in a subsequent clause. That suggests that compensation might only be made available not in cases where damage has been suffered, but in cases where one can show, by applying a difficult test, that the proceedings should never have been commenced or that certain actions should not have been taken during the proceedings. That troubles me greatly. 
 Although I do not know the best way to progress, I oppose the amendment because it widens the existing powers. I appreciate why they are being introduced, but, until I am satisfied that we have got the overall framework right, I do not want the existing powers to be widened. The receivers are being given more power than they have had hitherto in cases of this kind.

George Foulkes: I understand the hon. Gentleman's concerns, and I accept that they are genuine, rather than artificial or manufactured. However, I am unsure whether they are best dealt with in our discussion on this clause. With regard to that, he has tabled amendment No. 136, which the Committee will discuss later.

Dominic Grieve: The Minister may well be right, which is why amendment No. 136 proposes changes to clause 69, rather than to this clause—although they are linked.

George Foulkes: I accept that they are linked. The powers should, initially, be defined as widely as possible. The purpose of the legislation is to deal with people who have been carrying out drug trafficking or money laundering—people who are serious criminals. The hon. Gentleman wants, in spite of some of the amendments he tabled earlier, to tackle those criminals. Therefore, the definition of the powers should be as wide as possible. When we consider the exercise of those powers, we can decide whether further inhibitions are needed to protect the genuine and legitimate rights of those on whom were are making restraining orders in respect of the property.
 I am mindful of, and sympathetic with, the hon. Gentleman's point, but we need not discuss it in more detail now. I hope that, in retrospect, he will consider not opposing the Government amendments, and that he accepts the appropriateness of having as wide powers as possible. No doubt he can envisage situations when—because the powers are not wide enough—we allow criminals to get off the hook and not have restraining orders made against them. It is better to have such powers defined, and insert at a later stage any necessary safeguards. 
 Amendment agreed to. 
 Amendment proposed: No. 40, in page 31, line 1, leave out `sell' and insert `realise'.—[Mr. Foulkes.] 
 Question put, That the amendment be made:—
The Committee divided: Ayes 12, Noes 4.

Question accordingly agreed to. 
 Amendments made: No. 41, in page 31, line 37, after `(2)(b)' insert `or (d)'. 
 No. 42, in page 31, line 42, at end insert— 
`(8A) The court may order that a power conferred by an order under this section is subject to such conditions and exceptions as it specifies.'—[Mr. Foulkes.]
 Clause 49, as amended, ordered to stand part of the Bill. 
 Clause 50 ordered to stand part of the Bill.

Clause 51 - Powers

Amendments made: No. 43, in page 32, line 14, leave out from `property' to end of line 15. 
 No. 44, in page 33, line 16, at end insert— 
`(8A) The court may order that a power conferred by an order under this section is subject to such conditions and exceptions as it specifies.'—[Mr. Foulkes.]
 Clause 51, as amended, ordered to stand part of the Bill.

Clause 52 - Appointment

George Foulkes: I beg to move amendment No. 45, in page 33, line 28, leave out subsection (2) and insert—
`(2) But this section does not apply if— 
 (a) the confiscation order was made by the Court of Appeal, and 
 (b) when the Crown Court comes to proceed under this section the confiscation order has been satisfied.'
 This technical amendment is related to Government amendment No. 38, which we have already discussed. As the Committee will be aware, clause 52 applies automatically when the director is appointed as enforcement authority. Therefore, when the Court of Appeal appoints the director as enforcement authority following an appeal by the prosecutor or director, there is no need for it to direct the Crown court to proceed under the clause. That was why we deleted clause 33(11). As the Court of Appeal does not need to direct the Crown court to proceed under the clause, subsection (2) is not appropriate. In short, amendment No. 45 amends the clause to remove the reference to the Court of Appeal directing the Crown court. However, the effect of subsection (2) will continue to be that if the confiscation order has already been satisfied the Crown court is not obliged to make an order for the appointment of a director's receiver. 
 Amendment agreed to. 
 Clause 52, as amended, ordered to stand part of the Bill.

Clause 53 - Powers

Amendments made: No. 46, in page 34, line 9, leave out from `property' to end of line 10. 
 No. 47, in page 35, line 9, at end insert— 
`(8A) The court may order that a power conferred by an order under this section is subject to such conditions and exceptions as it specifies.'—[Mr. Bob Ainsworth.]
 Clause 53, as amended, ordered to stand part of the Bill.

Clause 54 - Enforcement receivers

Question proposed, That the clause stand part of the Bill.

Dominic Grieve: The clause specifies how sums in the hands of the receiver are to be disposed of after a confiscation order has been made. Will the Minister provide clarification of the system that will be used in such a case?

Bob Ainsworth: The clause will apply to an enforcement receiver appointed under clause 50 on the application of the prosecutor-—that is, in cases in which the director is not the enforcement authority. It specifies how sums in the hands of the receiver are to be disposed of after a confiscation order has been made. The sums are payable subject to certain prior payments, which the Crown court may order, to the enforcing justices' chief executive. Subsection (3) requires that, once a confiscation has been satisfied, any surplus sums in his hands must be paid as directed by the court to those with an interest in the property concerned. Hon. Members will also notice that the Crown court must give those with interests in the property concerned a reasonable opportunity to make representations before making directions under subsection (3). I hope that I have clarified the points about which the hon. Gentleman was concerned. If not, I am sure that he will pop up and ask further questions.
 Question put and agreed to. 
 Clause 54 ordered to stand part of the Bill.

Clause 55 - Sums received by justices' chief executive

Dominic Grieve: I beg to move amendment No. 134, in page 36, line 29, leave out subsection (7).

John McWilliam: With this it will be convenient to take amendment No. 135, in clause 57, page 38, line 4, leave out subsection (6).

Dominic Grieve: My earlier question was a lead-in to clause 55, which concerns the sums received by justices' chief executives. The clause, as we are told helpfully in the explanatory notes, sets out how an enforcing justices' chief executive must dispose of any moneys received in satisfaction of a confiscation order, whether from a receiver appointed under clause 50 or otherwise. We are told that the provision is similar to the current legislation except that an existing power for the justices' chief executive to reimburse the prosecutor out of confiscated moneys for sums the prosecutor has paid to a receiver in advance has been abolished, and the money will go to the Consolidated Fund.
 After reading that note, I read clause 55. I had great difficulty understanding subsection (7), which is why I tabled an amendment to remove it, on the basis that, if I could not understand it, perhaps it had no business to be in the Bill. The sensible thing to do may be for me to sit down to allow the Minister to explain it.

Bob Ainsworth: The hon. Gentleman employs a dreadfully unfair tactic. If he looks at my copy of the Bill, he will notice that there are a number of question marks scribbled by subsection (7) as well. I shall attempt to help him understand how subsection (7) works.
 The amendment would require the Crown to bear the cost of enforcing a compensation order where payment of the order was ordered out of confiscation money. The Bill carries forward existing legislation. The effect of clause 14(5) and (6) is to empower the court, where it makes both a confiscation order and a compensation order in the same proceedings, to order any shortfall in the payment of the compensation order out of the confiscation money, provided that the offender does not have sufficient funds to pay both orders. In effect, the provision enables the enhanced confiscation order enforcement powers to be applied to assist victims to receive their compensation. 
 The provisions that the amendment would delete deduct the cost of enforcement, pro rata, from any confiscated money that is paid out to satisfy the compensation order.

Dominic Grieve: It seems that flagging the matter has a wider purpose than merely examining the drafting. I thought that what the Minister said was happening, although I was not 100 per cent. sure. The matter is extraordinary because a sum that a person has been ordered to receive by the court is deducted from compensation orders. I am worried about the effect on victims of crime.

Bob Ainsworth: The hon. Gentleman is right. He has stumbled on an important matter which should be exposed to scrutiny. I shall continue to explain the Bill's current provisions and he may raise any resulting matters.
 There is a special provision in the confiscation regime in which both orders are made in the same case. Confiscation enforcement techniques may be used exceptionally to enforce a compensation order. Under such circumstances, compensation order recipients would enjoy the benefits of enforcement techniques to which they would not normally be entitled. Therefore, it is reasonable that they should bear their share of enforcement costs on a pro rata basis. I tell the hon. Gentleman—for the benefit of what he may wish to say, although he probably has more knowledge than I about the matter—that compensation orders, even those ordered by the Crown court, are relatively small. We envisage that confiscation orders will be made for substantial amounts. Therefore, the costs must be pro rata to ensure that, in the majority of cases, only a small proportion of costs will be reclaimed from the compensation order rather than attached to the confiscation. 
 That is the Government's thinking about the Bill. The hon. Gentleman did not stumble over only a drafting matter; it is a more important matter which he may wish to pursue.

Dominic Grieve: Clearly, I had understood the gist of the provision, which raises some interesting issues. The Minister may be able to enlighten the Committee about his comment that, at the moment, the compensation regime does not cover costs. I was slightly surprised to hear that because, although that may be so in theory, I have not been aware in practice of an order for compensation being made and resulting in complex costs of enforcement, partly I suspect because generally speaking the money has been readily available for that.

Bob Ainsworth: I hope that I did not say that. I did not mean to. I was trying to say that, at present the provisions are not available to enforce compensation, so powers under the confiscation regimes can be used to benefit victims. The provisions are not at present available for victims, so that route would not be available—not that currently they would have to pay.

Dominic Grieve: The Minister is most helpful. As I said, I must beware of giving the impression of having an excessive knowledge. I was familiar six, seven or eight years ago with cases in which compensation orders were made, but not from the field of practice in which I have been working more recently. I do not remember as a matter of practice difficulty being experienced when the court rules that compensation of £1,500 is payable to the victim and deductions are made from the sums that have been ordered, although, if that sum were not readily available—in my experience it usually has been—I suppose that some costs could, theoretically, be incurred.
 The circumstances in this case are rather different. The Minister said that the chances are that the confiscation orders will be made in respect of very substantial amounts, as we hope. I accept that the costs of realising those assets may be substantial. We cannot escape that. The Government will no doubt do their best to minimise the cost, as will the court and even, I suppose, the receiver, although perhaps I have a slight prejudice against receivers. 
 Large sums are involved. The victim, who may in some circumstances have had an order made that he should be compensated by a small sum, may find when the cheque finally arrives in the post that a pro rata deduction has been made to reflect the enforcement costs. I wonder whether that might cause a sense of injustice. I can envisage The Sun headlines when the court orders that a victim of crime should receive £2,500 compensation and she receives only £2,000 as the enforcement costs on the huge sum involved in the confiscation have, unfortunately, swallowed up an awful lot because of the receiver or other circumstances. 
 I accept the Minister's point that it would be perfectly legitimate to argue that the person receiving the compensation has been the beneficiary of the skills of the receiver in realising the assets. However, I have serious doubts that, in practice under compensation orders, huge problems have been experienced in realising assets. The Minister may know much more than I do about getting hold of assets to pay people under compensation orders. I believe that the system may ultimately be criticised because it seems unjust to the victim, who will often receive a small sum. 
 The matter seems to be a public policy issue. A long time ago, Parliament introduced compensation orders so that victims should be compensated by criminals to a sum assessed by the judge as fair and reasonable for the victim to receive. We are now introducing a system in which the victim will find that moneys have been deducted from that payment to cover administrative costs. I do not believe that that has happened in the past. Far from the poor old victim thinking that he has benefited from the confiscation regime, he will feel that it has done him out of a sum of money. 
 The question will then be: who should have priority in relation to confiscated assets? Should it be the victim or the state? My view is that it should be the victim. If the court has said that a victim needs compensation, the state, which obviously wants to confiscate assets, should give priority for compensation to the victim. In those circumstances, I ask the Minister to reconsider whether subsection (7) should be included. At the moment, I am open to persuasion that it should be maintained. I will not necessarily press the matter to a vote, but I am worried about it. It seems like the heavy hand of bureaucracy affecting the rights of victims and the compensation that the court feels that they should receive.

Mark Field: There is a temptation on the part of the state, in the broadest sense, or the justices' chief executive, to have two bites of the cherry in terms of the cost of bureaucracy. One cannot underestimate the extensive costs that may be part and parcel of the process. I entirely agree with what my hon. Friend said. My word of warning to the Government is that the newspaper headlines about victims who were told that they would get X, but end up getting X minus 30 or 40 per cent., will not look good. The state, in the broadest sense, is not only able to compensate itself out of the victim's money, but will also no doubt be the beneficiary in a fully fledged confiscation order. I am sure that that is not entirely what is intended and I hope, in the great majority of cases, that the sums will be de minimis.
 The real worry is the sheer cost of setting up the agency and all the other paraphernalia that goes with it in relation to court proceedings. There will clearly be a temptation for the agency, which will no doubt be under considerable financial constraints from the Treasury—again, it is a matter of public policy as much as anything else—to consider how its costs can be ameliorated through such a process. That may be to the detriment of genuine victims who are looking for compensation from those who are subject to such proceedings.

John McWilliam: Order. I am not accusing hon. Gentlemen of continuing to do this, but I remind hon. Members that the repetition rule does not apply to one person alone. If other Members repeat an argument already made, the rule kicks in.

Alistair Carmichael: I may be about to fall foul of it. Hon. Members will recall that, on Second Reading, concerns were expressed about the position of innocent third parties. The hon. Member for Beaconsfield, through an exemplary use of cosmetic procedure, identified one of the most innocent of innocent third parties. I associate myself firmly with his remarks.

Bob Ainsworth: Without repetition.

Alistair Carmichael: Hesitation or deviation.

John McWilliam: Order. The rule is tedious repetition.

Bob Ainsworth: Opposition Members have said things with which I do not disagree. However, I do not entirely agree with everything that the hon. Member for Cities of London and Westminster (Mr. Field) said. He must consider the fact—as we must—that the compensation order will be paid because the confiscation proceedings have been paid for and provided, and out of money that is confiscatable. Money that is the proceeds of crime and would have been returned to the state will have been diverted to pay for compensation for victims, after a pro rata share of the costs of discovering and levering out that money has been deducted under the Bill.
 I ask the hon. Member for Beaconsfield to withdraw the amendment and I hope that he will. However, for the sake of further consideration, I give the Committee my understanding of the current situation and the size of the matter that we are discussing. 
 Where a confiscation order was made, the magistrates court would enforce it either by voluntary payment from the defendant or means such as an attachment of earnings, a benefit order or a distress warrant. The magistrates court, not the victim, must meet the enforcement costs. Ultimately, as with a fine, a defendant could serve a term of imprisonment for failure to meet a compensation order. In 2000, the criminal court ordered 102,400 offenders to pay compensation orders. The average compensation order was £150 in a magistrates court and £1,292 in the Crown court. It is thought that the offender pays about 25 per cent. of the compensation that is awarded within the first 25 days and the remainder is spread in instalments over periods that are usually up to 12 months. A high proportion of cases require enforcement action—perhaps 60 per cent.—and around 8 per cent. of compensation cases result in custodial sentences. That is old data—we do not have any more recent—and the last formal research was conducted in 1992. 
 I give those figures to allow the Committee to consider the matter and I hope that the hon. Member for Beaconsfield picked up, from the tone of my reply, that I share some of his worries. On the basis that we will continue to examine whether the Bill should remain as written, and of my commitment to return to the matter, I ask him to withdraw the amendment.

Alistair Carmichael: Is this an accurate understanding of the Minister's position? He mentioned the average amounts that are recovered at present. The hon. Member for Beaconsfield said that the measure will affect only a small number of people. However, that is an acceptance that people will be affected and provision should be made for them.

Bob Ainsworth: No matter where we go with the matter, there will always be potential difficulties. The overwhelming majority of compensation cases will not involve confiscation.

Alistair Carmichael: With respect, we are talking about extending the legislation to include, for example, a large fraud case in which one could imagine that compensation would be appropriate.

Bob Ainsworth: I do not know whether the hon. Gentleman picked me up the wrong way round. I said that the overwhelming majority of compensation cases will not involve confiscation, rather than saying that confiscation cases will not involve compensation. I have not quite got my head around the percentage of confiscation cases that would involve compensation. In all probability, we will wind up dealing with compensation of victims differently because, unless the Crown pursues confiscation, facilities that are brought to those cases will not be available to victims. If the compensation case deals with a relatively small amount in comparison with the confiscation order, to what extent ought we to be looking to pro rata that out? Is it worth doing that, given the presentational difficulties with regard to cases in which we have identified the amount of compensation and are looking to claw a part of it back to repay the costs?
 If the compensation was the overwhelming majority—although the statistics suggest that that might not be the case—we might take a different opinion on that matter, because the resources provided by the confiscation proceedings would be effectively applied to recover substantial amounts at great cost, for the benefit of a victim who would have had little or no chance of getting hold of that sum had he been left to his own devices. 
 The issue under discussion is neither easy nor straightforward. It requires further consideration and I undertake to do that. For that reason, I ask the hon. Member for Beaconsfield to withdraw the amendment.

Dominic Grieve: The Minister has been fair and the Committee's discussion has fully covered a difficult matter.
 Although the relevant statistics are old, the Minister highlighted that it is unusual for thousands and thousands of pounds to be ordered to be paid to an individual. That might happen in some fraud trials, but small sums are usually involved. In those circumstances, to impose a clawback to cover the administration costs would be considered unfair by the public. It will bring the system into disrepute—especially as it will be noted that substantial sums are still being recovered by the state. 
 I am sure that the Minister appreciates that things would be rather different if one could say, ``I am sorry, but those were the costs of getting this money for you, and there is no other money, because that is all that we could lay our hands on.'' However, the matter appears less straightforward, given that the state are pouring into the Consolidated Fund tens or thousands—if not millions—of pounds from the same source. In those circumstances, the public would expect that the victim, who has had an assessment made for compensation, should come first. 
 However, in keeping with the spirit of co-operation and the friendly tenor of the debate, and given the Minister's assurance that he will further consider the matter, I am happy to withdraw the amendment. 
 I have not pressed the Minister about who proposed that the clawback should be introduced—whether it was the Lord Chancellor's Department, or the Treasury—but I suspect that the idea might not have originated in the Home Office. Someone ought to go and have a quiet word with whoever dreamed it up.

Bob Ainsworth: It is unfortunate that the hon. Gentleman has raised that point, as it is in existing legislation.

Dominic Grieve: A previous Conservative Government probably passed it.

John McWilliam: Order. I suspect that the relevant Committee was also chaired by me.

Dominic Grieve: Mr. McWilliam, you, as the Chairman, have to exercise impartiality, so nobody can blame you in this instance.
 One of the benefits of discussing new legislation—the Minister has sometimes taken me to task about this—is that we debate some clauses that have been on the statute book. That is a good thing, as it gives us an opportunity to see what our predecessors nodded through at various points of the morning or the evening sittings of Committees. 
 I am grateful to the Minister for the undertaking that he has given and I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 55 ordered to stand part of the Bill. 
 Clauses 56 to 63 ordered to stand part of the Bill.

Clause 64 - Management receivers: discharge

Bob Ainsworth: I beg to move amendment No. 48, in page 41, line 3, at end insert—
`(3A) Subsection (2) does not apply to property which the management receiver holds by virtue of the exercise by him of his power under section 49(2)(d).'

John McWilliam: With this we may discuss amendment No. 49, in page 41, line 7, at end add—
`(5) If this section applies the court may make such a consequential or incidental order as it believes is appropriate.'

Bob Ainsworth: Amendment No. 48 is technical. It ensures that the management receiver is able to retain property that he has realised to meet his remuneration and expenses, as permitted under clause 49(2)(d), and does not have to pass it on to the incoming enforcement receiver. That is the case for making the amendment.
 Amendment No. 49 grants the court discharging the management receiver the power to make consequential and incidental orders. The power might be useful when a management receiver is appointed and enforcement is made by the magistrates court, but there is no enforcement receiver. In practice, that would probably never happen, but the power would enable the court to authorise the transfer of funds from the management receiver to the enforcement justices' chief executive. 
 Amendment agreed to. 
 Further consideration adjourned—[Mrs. McGuire.] 
 Adjourned accordingly at one minute past Eleven o'clock till this day at half-past Two o'clock. {**vert_rule**}